With Chinese rod mills' rising asking prices for US customers, traders have raised their numbers for their US customers accordingly, once again bringing the price for import rod above that for domestic material.
Traders say that, based on the new prices out of China, they are now offering boron-added rods at a range of $55.50 cwt. to $56.50 cwt. ($1,224 /mt to $1,246 /mt or $1,110 /nt to $1,130 /nt) FOB loaded truck in US Gulf ports, not including the potential tax increase that the Chinese government may impose on boron-added rods, which the traders would have to split with the supplying mill. This new offering price level for import rods reflects a $3.00 cwt. ($66 /mt or $60 /nt) increase in the last week.
A couple of Chinese mills which do not do boron-adding are selling at a significantly higher price, and would have a selling price as high as $60.00 cwt. FOB loaded truck in US Gulf ports.
Even with this latest price increase, the pricing trend for Chinese rod offers for the US is still headed upward, as it still has some ground to catch up with the much-higher prices from other import rod sources like Turkey.
One trader told SteelOrbis this week that although he is still having trouble selling anything at over $56.50 cwt., in another two weeks the pricing level may very well have registered another big jump. Import rod arrivals are, however, expected to increase in the coming months, which may eventually help to somewhat ease the tightness in the market.
On the domestic side of the market, prices for July shipments continue to range from $54.00 cwt. to $55.00 cwt. ($1,191 /mt to $1,213 /mt or $1,080 /nt to $1,100 /nt) ex-mill, while high carbon offers will range from $56.50 cwt. to $57.50 cwt. ($1,246 /mt to $1,268 /mt or $1,130 /nt to $1,150 /nt) ex-mill.
As we mentioned last week, the pricing trend for domestic rod is also pointed in a squarely upward direction, as mills are expected to take advantage of the tight supplies in the market and continue raising their prices until they meet international levels. In addition, shredded scrap prices are expected to make a recovery in July, making the likelihood of another significant price increase for domestic rods in August very strong.